Your employer spent $20,143 on your family's health cover last year

By Skyler Bissell · August 10, 2026 · 9 min read

The average American family health plan cost $26,993 in 2025. Workers paid $6,850 of that out of their paychecks, so employers paid the other $20,143, and almost nobody who received it could tell you the number. It is compensation spent on you, it never touches your bank account, and it is the largest single item missing from every salary comparison you have ever read.

Those figures come from the Kaiser Family Foundation, whose Employer Health Benefits Survey has asked more than 1,800 employers the same questions for 27 years running. They are also the source behind every US healthcare figure in our own engine, which is why this post can put the invisible half next to the visible one and have both come from the same place.

The number is already on your W-2

You do not have to estimate this. The Affordable Care Act requires large employers to report the cost of employer-sponsored health coverage on Form W-2, in Box 12, under the two-letter code DD. The IRS is explicit that the entry is informational: "The amount reported does not affect tax liability, as the value of the employer contribution continues to be excludible from an employee's income and is not taxable."

Three details make the figure easier to read once you find it. Code DD holds the combined cost, your employer's contribution plus your own payroll deductions, so subtract what your payslips took to get the employer's share. Standalone dental and vision plans usually sit outside it, as do HSA contributions and health FSA salary reductions. And the reporting obligation applies to employers filing 250 or more W-2s, so a smaller company may leave the box empty even though it is paying plenty.

Most people have never looked. The box exists because Congress wanted the cost visible, and the result is a number printed once a year on a form people skim for the withholding total.

What the visible half costs, by metro

cityparity computes the part of a US healthcare bill a household can see on its own statements: the worker's share of the premium, out-of-pocket spending on deductibles and coinsurance, and dental and vision cover. The employer's contribution is deliberately outside that figure, because you never see it and you cannot spend it.

Here is that visible bill for the household our family comparison pages publish, two earners with children aged 3 and 6 on $280,000, in the age band where premiums carry a 15% loading:

cityparity engine figures for a two-earner household with children aged 3 and 6 on $280,000, 2026 rates. Every row is the household's own spending: worker premium share, out-of-pocket, dental and vision. The employer's contribution is excluded by design and adds a national average of $20,143 on top of all seven. Country-level take-home context is at take-home pay by country.

The Seattle line decomposes cleanly, and it is worth showing because it explains what our engine counts. The KFF worker share of a family premium is $7,920 a year in our Seattle file, multiplied by 1.15 for the 35 to 44 age band to give $9,108. Out-of-pocket spending on that household is $5,000, and dental and vision cover runs $60 a month, or $720. Add them and you have $14,828, of which the premium line on the payslip is $9,108. Behind that sits the employer's $20,143. On KFF's own averages the employer puts in about three dollars for every one the worker does, and covering this household costs somebody around $35,000 a year all in.

Austin comes out $2,219 below San Francisco on identical household inputs. Premium levels and deductibles differ that much between metros, and none of it reflects how much care anyone used.

Where the same money is printed on the payslip

European employers pay too. The difference is that the amount is legislated, published, and printed on the payslip every month.

Germany is the cleanest example. The Bundesministerium für Gesundheit sets the statutory health contribution at 14.6% of gross, with a supplementary rate averaging 2.9% for 2026, and both halves are split evenly between employer and employee. Long-term care insurance adds 3.6% on the same even split. Employer side, that is 10.55% of gross up to the 2026 contribution ceiling of EUR 69,750, so a German employer pays a maximum of about EUR 7,359 per employee per year toward health and care.

Two things about that comparison deserve stating plainly, because a straight $20,143 against EUR 7,359 is misleading in both directions.

The German employer pays per employee, and the American employer pays per policy. A German employee's non-earning spouse and children are covered under Familienversicherung at no extra contribution, so EUR 7,359 can cover a household of four, while $20,143 buys one family policy and a second working spouse would usually be on their own employer's plan. In our two-earner household both German earners contribute, which is why the engine shows a Berlin family paying €1,340 of visible healthcare cost against Seattle's $14,828: the German visible bill is out-of-pocket and dental only, since the premium already left as a payroll line.

The second point is that a ceiling changes the shape of the number as pay rises. The German contribution stops growing at EUR 69,750 of salary, so a senior engineer in Berlin on €194,000 pays the same health contribution as a colleague on half that. The American premium does not scale with pay at all, which produces the same regressive shape by a different route. Neither system charges you more for your coverage because you got promoted.

Whether all of this leaves you ahead depends on the pair of cities, which is what Seattle vs Berlin for a family prices line by line. If the question you care about is whether US premiums make the American tax advantage disappear, that has its own post: the true tax burden with healthcare added runs one household both ways and reports what the gap does. This page is about the compensation you are receiving; that one is about the burden you are carrying.

What to do with the number in an offer

Three uses, in rough order of how much money they move.

Comparing two US offers. A company with a rich plan and one with a thin plan can be $10,000 apart in real compensation while quoting the same base. Ask for the summary of benefits and the employee contribution schedule for the tier you would enrol in, family or single. That schedule is your side; subtract it from the total premium for theirs. Recruiters answer this question readily and rarely volunteer it.

Comparing a US offer with a European one. The American package includes roughly $20,000 of untaxed health compensation that no salary figure shows. The European package includes an employer social contribution that no salary figure shows either, and the pension half of it works the same way, which is where what happens to your 401(k) when you move abroad picks the thread up. Comparing gross to gross omits all of it, and comparing net to net omits it again. Pricing the whole package is the point of the hidden paycheck, and it is why our comparisons work in net cash after real costs.

Weighing a period without an employer. A sabbatical, a startup, or six months of contracting all mean buying that $26,993 yourself, or the marketplace equivalent. The employer contribution is the single largest thing you give up when you leave payroll in the United States, and it is worth pricing before you decide the salary drop is affordable.

FAQ

How much does my employer pay for health insurance?

For family coverage, an average of $20,143 a year in 2025. KFF's Employer Health Benefits Survey puts the total family premium at $26,993 and the average worker contribution at $6,850, leaving the employer with about 75% of the bill. For single coverage the total premium is $9,325 and the worker pays $1,440, so the employer covers roughly 84%. Your own employer's exact figure is printed on your W-2 in Box 12 under code DD.

Where can I find what my employer paid for my health insurance?

Box 12 of your Form W-2, code DD. The Affordable Care Act requires large employers to report the cost of coverage under an employer-sponsored group health plan there. The amount combines what the employer paid and what came out of your own paycheck, and the IRS states that reporting it does not affect your tax liability, because the employer's contribution stays excludible from your income. Standalone dental and vision plans, HSA contributions and health FSA salary reductions are generally left out of the figure.

Is my employer's health insurance contribution part of my salary?

It is compensation you receive, and no salary figure contains it. Your employer pays it on your behalf, it is excluded from your gross income under Internal Revenue Code Section 106, and it shows up in no base-pay figure, no levels.fyi entry and no offer letter. That is why comparing a US gross salary to a European one understates both sides: the American employer's premium contribution and the European employer's payroll contributions are both real money spent on you that no salary number contains.

Do European employers pay for health insurance too?

Yes, and the amount is published. In Germany the statutory health contribution is 14.6% of gross plus an average 2.9% supplementary rate for 2026, split evenly between employer and employee, with long-term care insurance adding 3.6% on the same even split. Applied to the 2026 ceiling of EUR 69,750 that caps the German employer at about EUR 7,359 per employee per year. It is a smaller number than the American one and it buys the whole household, since non-earning family members are covered at no extra contribution.

The number is already sitting in a PDF in your email. Whatever Box 12 says is money your employer agreed to spend on you, and knowing it changes what a competing offer has to clear. Price two cities side by side and the coverage line stops being a shrug.

Sources. Premiums and contributions: KFF, 2025 Employer Health Benefits Survey, published 22 October 2025, covering more than 1,800 employers with 10 or more workers. Employer shares are the published premium less the published worker contribution. W-2 reporting: IRS, reporting employer-provided health coverage on Form W-2. German contribution rates and the 2026 ceiling: Bundesministerium für Gesundheit and the GKV-Spitzenverband 2026 Rechengrößen. Visible-cost figures are computed by cityparity's per-city engine; per-field provenance is in data/_meta.json.

KFF figures are 2025 survey results, the most recent published, and premiums have risen 6% or more in each of the last three years. See the methodology.